Advice
In the past, employers used to prenote, which entailed sending a blank file to employees’ banks before the first live direct deposit transaction. Snag: Prenoting has fallen out of favor.
Payroll has moved to center stage at the IRS. Here are changes to watch for this year.
The standard deduction amounts are now one of the main drivers for determining whether employees will have enough income taxes withheld from their pay. On the other hand, low-income employees may be able to claim the earned income credit. Here’s the basic information they’ll need to make this determination.
The IRS has released the 2020 version of Form W-4, Employee’s Withholding Certificate.
Beginning Jan. 1, 2020, the minimum hourly wage for nonexempts who work on or in connection with new federal contracts or replacements for expiring contracts increases 20¢, to $10.80 an hour.
Employees paid biweekly are paid 26 times a year. Except when they’re not. And they’re not every 11 or 12 years, when there are 27 biweekly pay periods. Employees paid weekly experience an extra pay period every five or six years. The 27th/53rd pay period phenomenon is real and can cause havoc if you’re not prepared.
The good news, such as it is, is that the IRS can’t completely ditch withholding allowances, even though it’s dropped the word Allowance from the W-4, officially renaming it Employee’s Withholding Certificate. Here are our estimates of the 2020 withholding allowances.
The Work Opportunity Tax Credit provides an elective general business credit to employers that hire individuals who are members of one or more targeted groups. Maximum credit per employee: $2,400.
The base value of company vehicles that qualify for a simplified method of determining employees’ personal use of company vehicles—the fleet valuation rule or the standard mileage rule—increases substantially under proposed regulations.
The Department of Labor has concluded in an opinion letter to an inquiring employer that paralegals who earn $100,000 or more could qualify for the administrative exemption, if they performed one duty of an exempt administrator.
